The Financial Services Authority (FSA) has written to firms operating price comparison websites to ensure they are aware of their regulatory requirements.
The letter contains proposed guidance and highlights some concerns the FSA has around the fair treatment of customers. It also asks firms to think carefully about whether they are introducing, arranging or even advising customers on purchasing a contract of insurance – and whether they need to reflect that with a change in permissions.
The letter follows a review carried out between June and September 2010. Firms now have until 8 August 2011 to respond to the proposed guidance. As well as asking firms to consider whether or not they need to extend their permissions it also sets out examples of good and bad practice.
Some of the areas the FSA has highlighted include:
Making it clear that firms should take responsibility for checking eligibility or disclosure, rather than putting the onus on the customer
Reminding firms to check whether they hold the correct permissions, in particular where they may be inadvertently giving regulated financial advice without holding that permission
Reminding firms who are using a white label service to make it clear to customers which firm they are actually dealing with and who they should complain to should they wish to do so
Reminding firms that use a white label service to check that their provider holds the necessary permissions to conduct regulated activity.
In its review the FSA identified two business models: price comparison websites using a proprietary tool, and white label websites (or hosts) that use the comparison tool of a third party provider.